AT&T dials up its next Android, the Samsung Galaxy S4 Zoom.Photo by CNET

AT&T's early upgrade plan, called Next, is winning over customers.

That's according to AT&T Mobility CEO Ralph de la Vega, who said Next was exceeding the company's expectations for the plan's adoption rate. He projected 10 percent of its customers will sign up for the plan in the fourth quarter.

Related stories

Next is one of a wave of plans that debuted earlier this year. It allows customers to put no money down for a smartphone and, instead, pay for the phone in monthly installments. The primary feature of the plan is the ability to trade in your device for an upgrade after a year.

AT&T introduced Next a few days after T-Mobile launched its Jump plan, a similar format that allows customers to pay for their phones in monthly installments, but also includes a price break on the service plan. It's because of T-Mobile's break on service plans that many critics advised against customers signing up for AT&T Next, which still requires the same monthly service fees, despite the customer paying full price for their phones.

AT&T, however, still seems pleased with customer interest in Next.

"We love our Next plan," he said during an investor conference.

Next is only available in AT&T retail stores, but it will expand to business customers next month and to other retail outlets down the line, de la Vega said.

Next, which is primarily for existing customers, is attractive to people who want to upgrade early or don't want to pay the high upfront cost for a device, he said.

He bragged that Next would lead to higher margins because AT&T no longer had to pay a subsidy for a device.